South Africa’s manufacturing output contracted by 1.3 percent year-on-year in March following a revised 0.5 percent expansion in February, the statistics agency said on Thursday.
Statistics South Africa said factory production on a month-on-month basis increased 1.3 percent in March but shrunk by 1.7 percent in the three months to March versus the previous three months.
Mining production in March suffered its sharpest fall in two years and industrial output dropped, Statistics South Africa data showed on Thursday, prompting concerns that gross domestic product may slip into the red in the first quarter.
“The mining stats, as well as the manufacturing figures, signal a very dismal quarter one growth number. They’ll place the whole growth scenario under pressure, to the extent we could see the Q1 growth of between 0 and 0.5 percent,” said Elize Kruger, an analyst at NKC African Economics
The consumer-facing sectors of clothing and electronic items took the hardest hit, falling by over 10 percent each.
South Africa’s economy grew more than expected last year, by 3.1 percent in the final quarter and 1.3 percent for the whole year, cheered by agricultural output as the effects of severe drought eased.
Economists said Cyril Ramaphosa’s election as leader of the ruling African National Congress late in the last quarter of 2017, and as President in February, had also raised hopes the country would make economic reforms.
But enthusiasm has been tempered by local and external headwinds, analysts said, including a U.S. decision to impose tariffs on steel exports and a rising dollar threatening Pretoria’s 2018 target of GDP growth near 2 percent.